Cheap (31 page)

DONGGUAN ,
a boomtown in China’s industrial Pearl River Delta region, boasts steel and glass high-rises, staggering traffic jams, and the world’s biggest shopping mall. Dongguan lies a few hours’ drive north of Hong Kong in Guangdong, China’s most populated province and also its richest, thanks to the labor of roughly 30 million workers. Most of these are migrants, peasants from the neighboring provinces of Guangxi, Hainan, Fujian, Hunan, Sichuan, Guizhou, Yunnan, and Jiangxi. A Hainanese or Hunanese farmer stumbling off the overnight train into Guangdong is an alien in a foreign land or at least feels like one. Certainly, he or she is treated like one. Under China’s restrictive Household Registration Law, it is extremely difficult for migrants to obtain official city residency or the associated privileges and protections. Among many sad discrepancies is that while 95 percent of official resident children attend school, only 50 percent of migrant children do. Migrants are likely to be illiterate, unschooled in politics, and clueless in matters of labor law. Migrant workers who are aware of their legal rights have little leverage to demand their enforcement, and those who try are regularly turned away by government labor inspectors and police. Complicating matters is the widespread perception that migrant workers are low-class and unworthy, a belief that not a few migrants believe themselves. My translator in Shanghai, a college-educated sophisticate, told me she could spot a migrant instantly: “They are badly dressed, and their faces look stupid.”

As a consequence of their low status and lack of leverage, migrants are more likely to accept low-paid dangerous jobs. So Deng, a migrant to Guangdong from a mountainous region of central China, told a
Washington Post
reporter in January 2009 how he had stood knee deep in vats of hot toxic dye, seven days a week, twelve hours a day, at his job in the Overseas Fur Factory for a salary of $15 a month. Deng said many workers lost their footing or passed out in the fumes, but that did not deter him from persuading his seventeen-year-old son to sign on. In 2005, China reported 717,938 workplace accidents and 127,089 deaths, and since then the reports list more than 100,000 occupational deaths each year. But these are official government numbers; the actual numbers are thought to be much higher.

A diaspora of migrant workers who are funneled into China’s industrialized south make almost everything that is cheap in America: toys, clothes, bedding, stationery, sports equipment, electronics, lunch boxes, dashboard bubbleheads, fuzzy dice, hair elastics, Christmas ornaments, pencils, pens, and so on. Essentially, these migrants are America’s inden tured servants. Uprooted from their home villages, scraping together the fare to travel by train or bus hundreds or even thousands of miles and sometimes standing the whole route, migrants arrive in China’s great cities dazed, broke, and ready to take whatever jobs they can find under any conditions. Bosses assign them to dormitories and deduct room and board from their wages. Work contracts are sporadic and unpredictable. In news reports these workers are as cavalier about the dangers of their workplace as they are about the quality of the products they make. “In China no one worries about things lasting a long time,” my translator said. “Labor is so cheap that if something falls apart, we just make another one.”

 

 

 

LIKE MANY American companies, RC2 Corporation, based in Oak Brook, Illinois, has a motto: “Compelling, passionate parenting for all ages.” On its Web site the company boasts building “consumer loyalty by fulfilling passions of targeted consumers with branded toys, collectibles, hobby or infant products that encourage repeat purchases and are fun to own and use.” Selling toys to encourage the buying of more toys is an ingenious strategy, though most parents would probably prefer it not be targeted to them specifically. Safe to say this message was meant not for parents, however, but for RC2 shareholders, apparently with little worry that the two categories would overlap.

The toys made for RC2 in Dongguan—Thomas the Train sets aimed at children ages three to five—were finished with a liberal spraying of lead paint. Lead is a neuron-toxin known to lower the intelligence quotient of children who ingest it. Adults who inhale lead dust can suffer brain damage, kidney failure, memory loss, and miscarriage. This leads to the puzzling question of why an American company would purchase lead-painted toys from any factory, let alone one where underage workers without face masks spend their days spraying lead paint on children’s toys.

RC2 had a history of difficulties with its Chinese suppliers. It had recalled other products, like the Shake ’n Jingle Keys and John Deere Real Keys, baby toys with a tendency to break into a choking hazard. The company was also forced to recall the Learning Lamaze Activity Toy, due to its contamination with
pseudomonas aeruginosa
and
pseudomonas putida
bacteria. Considering this bleak record, it is sobering to consider that 80 percent of all the toys in the world today—most of them marketed by American and multinational companies—are made by migrant workers in Chinese factories.

Substandard and fake goods are so common in China that the Chinese have an expression, heixin (pronounced
hey-sin
), to describe those who make, sell, or profit from them. Heixin roughly translates as “black heart.” The Chinese, though perhaps not comfortable coexisting with these black hearts, appear to be resigned to them. The problem is not confined to exports but to the things Chinese use themselves, including food. Writing in
The New Yorker
magazine, Chinese food expert Fuchsia Dunlop quotes restaurateur Dai Jianjun: “You just can’t trust the ingredients you buy in the markets. Vegetables laced with chemicals. Fake birds’ nests held together by glue.” For his own elegant restaurant Jianjun assures safety by sending assistants out to the countryside to buy food directly from farmers or even to forage for it themselves in the wild.

The Chinese government has taken steps to deal with the problem of tainted goods, most dramatically with the very public 2007 execution of Zhen Xiaoyu, the director of the China Food and Drug Administration who was convicted of taking bribes from drug companies. (His corrupt practices were linked to forty deaths in Panama from cough syrup that contained diethylene glycol in place of glycerin.) But efforts to improve conditions for the Chinese people themselves, particularly Chinese workers, have been slow in coming. America’s demand for cheap encourages and enables this complacency.

AMERICAN COMPANIES claim to source from responsible factories with health and safety protections, and fair wages and working hours. But in China graft is rampant, and transparency is not. After a decade of monitoring Chinese factories, most outsiders have no idea what goes on once the inspectors go home—and some prefer not to know. Often, dummy or model factories serve as the public face for other illegal factories operating completely off the books.
New York Times
correspondent David Barboza covered the Chinese factory beat for several years. “Everything is linked,” he told me. “Factories that observe the rules outsource to factories that observe only some or none of the rules. But, anyway, enforcement of rules is not a priority.”

Americans don’t like tainted dog food or exploding tires or other dangers traced to Chinese manufacturers. We prefer our milk straight, not laced with melamine to artificially boost its protein content. We do not approve of spraying children’s toys with lead paint. Still, increasingly, we are not willing to look too deeply at the causes or real solutions of these problems. Responding to the lead paint incident,
New York Times
business columnist David Leonhardt wrote, “This isn’t really about replacing toy trains. It is about the realities of offshoring, and it doesn’t yet have a tidy, Thomas-style ending. What happens in Chinese factories determines how good—how reliable and how safe—many products are. So there is no way for executives to distance themselves from China without also distancing themselves from their own product.”

Sellers of consumer goods of all kinds typically obscure the pedigrees of their products, making it difficult for consumers to know just what it is we are getting. Tracing the lead-painted Thomas the Train caboose to the Ohio-based RC2 Corporation, one would assume it was made in the American Midwest, not the Pearl River Delta. The same might be said for many other toy manufacturers. How are we consumers to know where our purchases come from when even Mattel’s iconic American Girl Doll is made in China?

And the pricier the purchase, the more difficult it is to trace—be it to China, Vietnam, India, or Latin America. Executives at high-end shirt maker Tommy Bahama may not want customers to know that its $100 Tortola Trance shirts are made by Oxford Industries, the same parent company that makes $12.99 Mercerized Simple Luxury Polos for Dockers. Nancy Cleeland won a Pulitzer Prize for her reporting on the working conditions in factories where companies like Oxford do their manufacturing. Her focus was on Latin America, which, being closer than China to the United States, is where many manufacturers of fashion goods once preferred to locate—at least until price pressures sent them elsewhere. “I went to San Pedro Sula, Honduras, and saw big sewing factories there,” she said. “There was a huge flow of women coming in from the countryside—always women, because they are supposed to be better workers than men.” At the Oxford Cosmos clothing factory Cleeland spoke with Isabel Reyes. Reyes was an eleven-year veteran of the factory. She sewed sleeves on shirts at a rate of twelve hundred a day for a wage of $35 a week. Her arms were too sore to keep working or even to pick up her daughter without daily doses of pain medication. She was exhausted from overwork and sleep deprivation. But the kicker Cleeland told me was this: Reyes lost her job. Apparently $35 a week was too high to accommodate Oxford’s low-price demands. The company had assigned a manager, Chuck Wilburn, to scout out a new location. Wilburn was very unhappy about having to lay off thirteen hundred workers in San Pedro Sula. Years before, he was equally unhappy about laying off even more workers in North Carolina where Oxford closed all forty-four of its factories.

Richard Locke, professor of Entrepreneurship and Political Science at the Sloan School of Management at the Massachusetts Institute of Technology, is an expert on economic development, comparative labor relations, and political economy. To his mind, he said, there is worldwide only one force powerful enough to enforce workers’ rights and protection: guilt. And there is only one institution capable of evoking that force: the Vatican. So far the Vatican has not gotten into the factory inspection business, but no other entity on earth, Locke said, can prevent global industry from exploiting and abusing global labor. “There is no enforced international law on the books that limits and sets hours, child labor, or anything else,” he said. “The laws are not enforced because there is no global governing institution. In this vacuum there are many private codes of conduct by individual companies, but there is neither the will nor the capacity to monitor, to see whether companies are living up to these codes.”

Locke explained that even when an overseas factory is audited, the information does not often lead to change. “If you look at audit scores of factories, they go in and out of compliance all the time,” he said. The offending factory is given time to improve and often does on the factor for which it is cited. The problem is that in the next inspection, new and different violations pop up to take their place. “Bad audits,” Locke said, “have no consequences.”

A handful of multinationals badly burned by embarrassing publicity have created what they claim is a vigorous system of auditing their suppliers. Locke oversaw a famous case study of one of these companies, Nike, and to his surprise found that the longer a foreign supplier was associated with this “enlightened” company, the worse it treated its workers. Nike invested $11 million in audits and other measures over two years, yet according to Locke’s findings, conditions in their suppliers’ factories improved only marginally. This disappointing performance, Locke said, is typical across industries and across the developing world.